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IFA Brochure

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Step 1: Active Investors Step 2: Nobel Laureates Step 3: Stock Pickers Step 4: Time Pickers Step 5: Manager Pickers Step 6: Style Drifters Step 7: Silent Partners Step 8: Riskese Step 9: History Step 10: Risk Capacity Step 11: Risk Exposure Step 12: Invest and Relax 1 IFA | 12-Step Brochure TABLE OF CONTENTS About IFA 3 IFA Fiduciary Wealth Services 4 The Value of a Passive Advisor 5 IFA’s Investment Philosophy 6 Step 1: Active Investors 7 Step 2: Nobel Laureates 8 Step 3: Stock Pickers 9 Step 4: Time Pickers 10 Step 5: Manager Pickers 11 Step 6: Style Drifters 12 Step 7: Silent Partners 13 Step 8: Riskese 14 Step 9: History 15 Step 10: Risk Capacity 16 Step 11: Risk Exposure 17 Step 12: Invest and Relax 18 IFA Index Portfolios 19 IFA Index Portfolio 100, 75, 50, 25 Fact Sheets 20-27 Disclosure for Charts & References i Disclosure for the Hypothetical Back-Tested Performance of Model IFA Index Portfolios and Indexes ii-iv Index Descriptions v-xiv Index Fund Advisors, Inc. V. 8-2020 2 ABOUT IFA Index Fund Advisors, Inc. (IFA) is a fee-only wealth The value of IFA extends beyond superior investment management firm that provides risk-appropriate, advice. As a holistic financial partner, IFA helps guide returns-optimized, globally-diversified and tax- investors through life and retirement stages. Our Wealth managed investment strategies with a fiduciary Advisors take a personalized approach to matching standard of care. people with portfolios while providing a full-range of wealth services for a better overall client experience. Founded in 1999, IFA is a Registered Investment Adviser that provides fiduciary wealth management services to Through its IFA Taxes division, IFA provides individuals, individuals, trusts, corporations, non-profits, and public businesses, trusts and non-profit entities across the and private institutions. Based in Irvine, California, United States a wide range of tax planning, tax preparation IFA manages individual and institutional accounts, and accounting services.* including IRA, 401(k), 403(b), profit sharing, pensions, endowments and all other investment accounts. IFA For updates and further information, visit ifa.com. also facilitates IRA rollovers from 401(k)s and 403(b) *IFA Taxes does not provide auditing or attestation services and therefore is s. As of December 31, 2019 more than 2,400 clients not a licensed CPA firm. IRS Circular 230 Disclosure: To ensure compliance nationally entrusted approximately $4.08 billion of their with requirements imposed by the IRS, we inform you that any U.S. Federal tax advice contained in this communication is not intended or written to be assets to IFA’s care. used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein. 20 Years, 10 Months (3/1/1999 - 12/31/2019 $4.08B $4.0B $3.84B $3.60B $3.5B $3.08B $3.0B $2.66B $2.74B $2.5B $2.23B AUM $2.0B $1.73B $1.44B $1.5B $1.33B $1.04B $1.03B $1.0B $703M $812M $355M $500M $175M$260M $6M $35M $55M $80M $0 1999* 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 *IFA was Founded in 1999 Year Ending Past performance does not guarantee future results. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantee investment strategies will be successful. Investing involves risks, including possible loss of principal. 3 IFA | 12-Step Brochure IFA FIDUCIARY WEALTH SERVICES IFA combines personalized advice with customized wealth articles and videos, tax planning and tax preparation, management services to assist our clients in achieving an automatic annual glide path de-risking option, tax- their long-term financial goals. These services are listed loss harvesting, detailed financial planning, monthly below and include: educational wealth management performance reporting and much more… FIDUCIARY WEALTH SERVICES WEALTH MANAGEMENT ACCOUNTING IFA provides investment advisory services IFA Taxes provides collaborative tax advice, that focus specifically on matching people tax planning, accounting, bookkeeping with portfolios of passively managed or and tax return services to individuals and index mutual funds, based on the client’s business entities across the United States. risk capacity. SOCIAL SECURITY FINANCIAL PLANNING OPTIMIZATION SERVICES IFA offers robust financial planning utilizing IFA Wealth Advisors and expert resources eMoney to provide a complimentary, wealth provide a powerful solution to determine management system that will allow our how to maximize your social security clients to track their assets, liabilities, income, benefits and further outline your complete and spending across all their accounts as financial picture. well as store all their important documents. CHARITABLE GIVING SERVICES RETIREMENT PLANNING IFA Wealth Advisors assist clients in setting With the aid of the IFA Retirement Plan up donor advised funds, which are charitable Analyzer, IFA Wealth Advisors are able to giving accounts that provide an efficient way help clients make more informed decisions to make grants to charities. in each stage of retirement. LENDING SERVICES COLLEGE PLANNING IFA Wealth Advisors can assist clients in IFA’s College Savings Analyzer helps IFA accessing various lending solutions that Wealth Advisors align a client’s college are secured by the client’s portfolio. These funding objectives with an appropriate solutions include pledged lines of credit, college savings and investment plan. non-purpose loans and margin loans through Charles Schwab and Fidelity. REFERRAL SERVICES INSURANCE TRUSTEE ESTATE PLANNING SERVICES SERVICES SERVICES Index Fund Advisors, Inc. 4 THE VALUE OF A PASSIVE ADVISOR As low-cost index fund investing continues to gain in A knowledgeable passive advisor can provide several popularity, numerous researchers have turned their services, including the critical discipline needed to attention to quantifying the value a passive advisor can combat emotional, reflex reactions. When advice bring to an index portfolio. One such study conducted is combined with funds from DFA, a science-based by Vanguard, the leading provider of index funds passive fund company, investors avail themselves quantified the “advisor alpha.” This advisor alpha is the of the opportunity to keep more of what the market sum of the value added by advisors who adhere to the delivers. principles of controlling costs, maintaining discipline and tax awareness, relative to other advisors or unadvised IFA analyzed the performance of 533 clients who had investors. The greatest contribution a passive advisor been working with our advisors for at least 11 years brings is behavioral coaching, according to the study — from 2008 through 2018. This period included the or as William Bernstein so succinctly puts it: “Wall Street decline of equities during the global financial crisis is littered with the bones of those who knew just what of 2008 and early 2009, as well as the subsequent to do, but could not bring themselves to do it.” The recovery period. Even though many of these clients breakdown of the advisor alpha set forth in Vanguard’s had inception dates prior to Jan. 1, 2008, we chose 2014 & 2018 studies are shown below. this time period so that each investor would have experienced the same market conditions. For each of Breakdown of Vanguard Advisor's Alpha the 100 benchmark IFA Index Portfolios, our research 2014 2018 Implementation with Cost-Effective Funds 0.45% 0.34% team maintains monthly historical returns that can Disciplined Rebalancing 0.35% 0.26% be used to benchmark clients’ time-weighted returns. Behavioral Coaching 1.50% 1.50% IFA determined the annualized returns of the clients’ Asset Location 0-0.75% 0-0.75% index portfolios and compared that to the original Annual Withdrawal Strategy 0-0.70% 0-1.10% recommended IFA Index Portfolio. The clients were Determining an Appropriate Asset Allocation Not Quantified Not Quantified divided into three groups based on how closely they Total Return Investing vs. Reaching for Yield Not Quantified Not Quantified followed IFA’s advice. The results of the study are Source: Francis M. Kinniry Jr., Colleen M. Jaconetti, Michael A. DiJoseph, Yan Zilbering, and Donald G. Bennyhoff, 2019. Putting a value on your value: Quantifying illustrated in the chart below. Vanguard Advisor’s Alpha. Valley Forge, Pa.: The Vanguard Group “Putting a Value on Your Value: Quantifying Vanguard Advisor’s Alpha”, Vanguard Research, 2014. IFA Client Success at Capturing Benchmark Index Returns 11 Years (1/1/2008 to 12/31/2018) Client’s Average Percentage of Benchmark Annualized Returns 100.32% 82.35% 77.93% Clients that Did Follow Clients that Clients that Did Not Follow IFA's Advice Recalibrated IFA's Advice Average of 209 clients that kept Average of 163 clients that decreased Average of 161 clients that either decreased within 9 risk levels of IFA’s original their risk level by 10 to 25 compared to their risk level by more than 25 or increased recommendation IFA’s original recommendation by more than 10 compared to IFA's original recommendation Source: Internal analysis of 533 portfolios of IFA clients that were clients as of 1/1/2008 and stayed through 12/31/2018. Returns calculated as annualized returns. The benchmark is IFA’s recommended IFA Index Portfolio at the beginning of the client relationship. All client index portfolios were evaluated for that 11-year period, which we consider to be a difficult period because it includes a steep drop followed by a full recovery. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantees investment strategies will be successful.
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